This was originally published on Monday, October 3 ,2016 in the Pacific Daily News. Click here to subscribe to the PDN.
Q: I was at the store the other day and used my debit card to make a purchase. To my surprise my transaction was denied. I checked my account right away and noticed that there were several suspicious charges from a company I use frequently. I was embarrassed and because of these charges my account was overdrawn. I have several scheduled automatic payments that are not going to be paid. I’m scared my account has been compromised, what should I do?
A: It is a scary feeling to think you have enough money to cover your day-to-day expenses and then discover that your account has been compromised. So many questions form in your mind and you start to think of the worst.
In this day and age, we use our debit or credit cards to pay for almost anything, making us susceptible to fraudulent charges. Unauthorized debit card charges can happen for many reasons. Some of the more common reasons are accidentally being charged twice, being overcharged, a credit return failed or nondelivery of goods through the mail.
No matter the reason, the sooner the mistake is found, the better chance you have on disputing the charge.
- Gather all information. Take time and look through all your receipts. If you share a joint account, ask the joint holder if they recently made the purchase. Be aware that some online stores use a third party to handle their purchases and the statement will list that third party’s name, not the online shop’s. If you are certain that the charge is fraudulent, contact your bank right away. Inform your bank that you have unauthorized charges on your statement and that you will be contacting the merchant. Your bank will then discuss several options with you including freezing your account until more information is provided.
- Contact the merchant. If you have a phone number, call the merchant and discuss the charges. Ask if there is anything they can do to reverse the charges. Most merchants value your patronage and are usually willing to work with you, especially if the error is a mathematical mistake or a non-receipt of a product or service. If the merchant is not willing to correct the error, then contact your financial institution. By contacting the merchant first, you are showing a “good faith” effort to work out the situation.
- Work with your bank. If the merchant refuses to rectify the mistake, you have 60 days from the time of the unauthorized purchase before being held accountable. Let your bank know that you contacted the merchant and they are unwilling to reverse the charges. The bank has 10 days to investigate an unauthorized charge. After the 10 days, your bank must contact you with their findings within three days. If the investigation is incomplete after the 10 days, your financial institution must credit your account for the full disputed amount, less $50, while continuing the investigation.
If the transaction was conducted within the United States, the financial institution has an additional 45 days to resolve the issue. If the transaction is made outside the United States, then your financial institution has 90 days to resolve the issue. If the bank finds that there is an error that has occurred, they must pay you within one business day of finding that error.
On the other hand, if the charges are legitimate, the financial institution must give you written notice before taking the money that was credited to you earlier. If you used your debit card as a credit card, you may fall under different guidelines which can be found at http://www.consumerfinance.gov.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.